News

Fraudsters making false car insurance claims are getting away with it because they are not being prosecuted, a leading judicial figure said.

Former High Court president Nicholas Kearns warned Ireland has a huge problem with fraudulent motor claims, and there appeared to be no punishment for lying in court.

Meanwhile, insurers have been accused of creative accounting to justify their soaring premiums.

Mr Kearns said there were few deterrents for fraudsters.

“There is a significant amount of fraud permeating the motor claims scenario,” he said.

The insurance industry estimates that fraud costs around €200m a year.

But the former High Court president said the true figure was a multiple of this as that figure only represented the levels of fraud that were detected. And it did not account for exaggerated claims.

There were three reasons for the high level of fraud, he told ‘Today With Sean O’Rouke’ on RTÉ Radio.

He said settlements for claims were large in this country, which encouraged fake claims; there was also very little chance of detection for those making false claims; and the other factor encouraging fraudulent claims was that few fraudsters were ever prosecuted for perjury.

Mr Kearns said the chances of a fraudster being charged with perjury were “infinitesimal”.

But he praised the fact that judges have “rumbled” a number of fraudulent claimants lately.

Mr Kearns now heads up the Government’s Personal Injuries Commission, which is looking at levels of award in this country and comparing them to those in other states.

Asked about solicitors taking cases they know to be questionable, he said: “I know the Law Society is very anxious to stamp it out as it does not reflect well on them.”

His comments come as a leading critic of the insurance industry accused it of engaging in creative accounting to justify spiralling premiums.

Premiums

Dorothea Dowling, who is former chairwoman of the Motor Insurance Advisory Board, questioned the justification for premiums rising by 70pc in the past three years.

Ms Dowling said an official insurance report showed the cost of claims only rose by 3pc between 2013 and 2015.

Her comments came a year after the Government’s Cost of Insurance Working Group, set up by Minister Eoghan Murphy, recommended a range of reforms to cut the cost of cover.